BPOP Popular Inc

• Reports net income of $62.6 million and adjusted net income of $90.5 million
• The continuing operations reflected a net income of $32.8 million and adjusted net income of $81.7 million
• The discontinued operations reflected a net income of $29.8 million and adjusted net income of $8.8 million
• Adjusted net interest margin of 4.64% in Q3 2014 vs. 4.68% in Q2 2014
• Credit Quality (excluding covered loans):
  • Non-performing loan inflows, excluding consumer loans, were down by $23.8 million, or 15.7%, from Q2 2014;
  • Non-performing loans held-in-portfolio (NPLs) decreased by $17.8 million, or 2.8% from Q2 2014; NPLs to loans ratio decreased to 3.2% from 3.3% in Q2 2014;
  • Net charge-offs (NCOs) were 0.83% of average loans held-in-portfolio vs. 0.94% in Q2 2014; NCOs declined $5.7 million quarter over quarter;
  • Allowance for loan losses of $521.7 million vs. $526.2 million in Q2 2014; Allowance for loan losses to loans held-in-portfolio at 2.69% vs. 2.68% in Q2 2014.
• Completed the sale of its Central Florida and Illinois regional operations
• Repaid TARP funds on July 2, 2014
• Common Equity Tier 1 ratio of 14.8% and Tangible Book Value per Share of $36.24 at September 30, 2014; capital exceeds well-capitalized minimum threshold by $2.2 billion.

Popular, Inc. (the “Corporation” or “Popular”) (NASDAQ:BPOP) reported a net income of $62.6 million and adjusted net income of $90.5 million for the quarter ended September 30, 2014, compared to net loss of $511.3 million and adjusted net income of $86.2 million for the quarter ended June 30, 2014.

Mr. Richard L. Carrión, Chairman of the Board and Chief Executive Officer, said: "In the third quarter Popular reached important milestones, such as the repayment of TARP and continued the restructuring of our U.S. operations, completing the sale of our Illinois and Central Florida operations. These accomplishments come in concert with another period of stable results and credit quality, reflecting our ability to operate successfully even under challenging conditions".

  Earnings Highlights           (Unaudited)   Quarters ended   Nine months ended (Dollars in thousands, except per share information)   30-Sep-14   30-Jun-14   30-Sep-13   30-Sep-14   30-Sep-13 Net interest income (expense) $ 326,421 $ (59,381 ) $ 331,012 $ 618,211 $ 990,067 Provision for loan losses – non-covered loans 68,166 50,074 48,715 172,362 486,783 Provision for loan losses – covered loans [1]     12,463       11,604       17,433       49,781       60,489   Net interest income (expense) after provision for loan losses 245,792 (121,059 ) 264,864 396,068 442,795 FDIC loss share expense (4,864 ) (55,261 ) (14,866 ) (84,331 ) (44,887 ) Other non-interest income 129,194 118,050 301,575 367,482 650,624 Operating expenses     310,640       275,439       308,292       863,678       917,381   Income (loss) from continuing operations before income tax 59,482 (333,709 ) 243,281 (184,459 ) 131,151 Income tax expense (benefit)     26,667       (4,124 )     17,768       45,807       (276,489 ) Income (loss) from continuing operations   $ 32,815     $ (329,585 )   $ 225,513     $ (230,266 )   $ 407,640   Income (loss) from discontinued operations, net of tax   $ 29,758     $ (181,729 )   $ 3,622     $ (132,066 )   $ 28,656   Net income (loss)   $ 62,573     $ (511,314 )   $ 229,135     $ (362,332 )   $ 436,296   Net income (loss) applicable to common stock   $ 61,643     $ (512,245 )   $ 228,204     $ (365,124 )   $ 433,504   Net income (loss) per common share from continuing operations - Basic   $ 0.31     $ (3.21 )   $ 2.18     $ (2.27 )   $ 3.94   Net income (loss) per common share from continuing operations - Diluted   $ 0.31     $ (3.21 )   $ 2.18     $ (2.27 )   $ 3.93   Net income (loss) per common share from discontinued operations - Basic   $ 0.29     $ (1.77 )   $ 0.04     $ (1.28 )   $ 0.28   Net income (loss) per common share from discontinued operations - Diluted   $ 0.29     $ (1.77 )   $ 0.04     $ (1.28 )   $ 0.28     [1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.  

Significant events

• On July 2, 2014, the Corporation completed the repayment of TARP funds to the U.S. Treasury through the repurchase of $935 million of trust capital securities issued to the U.S. Treasury under the TARP Capital Purchase Program. The Corporation funded the repurchase through a combination of available cash and approximately $400 million from the proceeds of the issuance of its $450 million aggregate principal amount of 7% Senior Notes due on 2019 issued on July 1, 2014.

On July 23, 2014, the Corporation also completed the repurchase of the outstanding warrant initially issued to the U.S. Treasury under the TARP Capital Purchase Program in 2008. The warrant represented the right to purchase 2,093,284 shares of the Corporation’s common stock at an exercise price of $67 per share with an original term of 10 years. The Corporation and the U.S. Treasury agreed upon a repurchase price of $3.0 million for the warrant. With the completion of this transaction, the Corporation completed its exit from the TARP Capital Purchase Program.

In connection with the repayment of TARP on July 2, 2014, the Corporation accelerated the related amortization of the discount and deferred costs amounting to $414.1 million, which is reflected as part of interest expense in the consolidated statement of operations, during the second quarter of 2014.

• During the third quarter of 2014, the Corporation completed two of the previously announced sales of its regional operations in the U.S. The sales of its Central Florida and Illinois operations resulted in a net gain of $1.2 million and $24.6 million, respectively. The sale of the California region is expected to be completed before the end of the year.

The Corporation continues its strategy of centralizing certain back office operations in Puerto Rico and New York. The Corporation incurred $8.3 million in restructuring charges during the third quarter of 2014. Over the course of the fourth quarter of 2014 and early in 2015, an additional $41 million in restructuring charges are expected to be incurred, comprised of $22 million in severance and retention payments and $19 million in operational set-up costs and lease cancelations. Upon the completion of the regional sales and the centralization of operations in the first half of 2015, annual operating expenses are expected to decrease by approximately $40 million, after the reorganization is complete. This decrease in expenses is expected to offset the reduction in revenues that will result from the sale of the regional operations.

In connection with the restructuring of its U.S. mainland operations, the Corporation is also taking steps to restructure its balance sheet and funding strategies. As part of the strategy, during the third quarter of 2014, the Corporation sold approximately $94.2 million in securities available for sale and refinanced approximately $638 million in long term structured repos in the U.S. with a yield of 4.41% and replaced them with lower cost short-term repos of a similar amount. The fees associated with the refinancing of these repos were $39.7 million, of which $20.7 million were recorded as interest expense during the third quarter of 2014, with remainder to be recorded during the fourth quarter of 2014.

The Corporation also sold or entered into agreements to sell certain of its legacy and classified loans in the U.S. for an aggregate of approximately $220.7 million which resulted in a net loss of approximately $12.0 million in the quarter, which is reflected in the provision for loan losses.

• As previously disclosed, on July 31, 2013, BPPR filed a statement of claims with the American Arbitration Association requesting that the review board determine certain matters relating to the loss-share claims under its commercial loss share agreement with the FDIC. The statement of claim also included requests for reimbursement of certain valuation adjustments for discounts to appraised values, costs to sell troubled assets and other items. On October 17, 2014, BPPR and the FDIC settled the claims that had been submitted to the review board. The settlement provides for an agreed methodology for submitting claims for reimbursement of charge-offs for late stage real-estate-collateral-dependent loans. While the terms of the settlement could delay the timing of reimbursement of certain claims from the FDIC, the settlement is not expected to have a material adverse impact on BPPR’s current estimate of expected reimbursable losses for the covered portfolio through the end of the loss share agreement in the quarter ending June 30, 2015.
• On October 20, 2014, the Memorandum of Understanding (the “MOU”) entered into on July 2, 2011 between Popular, Inc., BPPR, the Federal Reserve Bank of New York (the””FRB-NY”) and the Office of the Commissioner of Financial Institutions of Puerto Rico was lifted. The MOU provided, among other things, for the Corporation to take steps to improve its credit risk management practices and asset quality, and for the Corporation to develop strategic plans to improve earnings and to develop capital plans. The MOU also required the Corporation to obtain approval from the applicable MOU counterparties prior to, among other things, declaring or paying dividends, purchasing or redeeming any shares of its stock, consummating acquisitions or mergers, or making any distributions on its trust preferred securities or subordinated debentures.

The decision to sell three of its U.S. regional operations resulted in the discontinuance of each of these respective operations. As required by US GAAP, current and prior periods presented in the consolidated statement of operations as well as financial information covering income and expense amounts presented in this earnings release has been retrospectively adjusted for the impact of the discontinued operations for comparative purposes. The consolidated statement of financial condition and related financial information for prior periods included in this earnings release do not reflect the reclassification of BPNA’s assets and liabilities to discontinued operations. Refer to Table P for a detail of the net loss, assets and liabilities from the discontinued operations. Also, refer to Table Q for details of the restructuring charges incurred during the quarter ended September 30, 2014.

The following table reflects the results of operations for the third quarter of 2014, with adjustments to exclude the impact of significant events.

    Quarter ended (Unaudited)   30-Sep-14 (In thousands)   Actual Results (US GAAP)   BPNA Reorganization [2]   Income Tax Adjustments [3]   Indemnification Asset Adjustment [4]   Adjusted Results (Non-GAAP) Net interest income $ 326,421   $ (20,663 )   $ -   $ -   $ 347,084 Provision for loan losses – non-covered loans 68,166 11,950 - - 56,216 Provision for loan losses – covered loans [1]     12,463       -       -       -     12,463   Net interest income (expense) after provision for loan losses 245,792 (32,613 ) - - 278,405 FDIC loss share expense (4,864 ) - - 15,046 (19,910 ) Other non-interest income 129,194 - - - 129,194 Restructuring costs 8,290 8,290 - - - Other operating expenses     302,350       -       -       -     302,350   Income (loss) from continuing operations before income tax 59,482 (40,903 ) - 15,046 85,339 Income tax expense     26,667       -       20,048       3,009     3,610   Income (loss) from continuing operations $ 32,815 $ (40,903 ) $ (20,048 ) $ 12,037 $ 81,729 Income (loss) from discontinued operations, net of tax   $ 29,758     $ 20,949     $ -     $ -   $ 8,809   Net income (loss)   $ 62,573     $ (19,954 )   $ (20,048 )   $ 12,037   $ 90,538   [1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.   [2] Includes losses on bulk sales and reclassifications to loans held-for-sale of classified and legacy loans for an aggregated net loss $12.0 million, loss on the refinancing of structured repos for $20.7 million recorded as interest expense, restructuring cost of $8.3 million and the net gain of $25.8 million on the sale of the Central Florida and Illinois regional operations, which was offset by costs directly associated with the unwinding of the regions subject to the sales for $4.8 million.   [3] As disclosed last quarter, on July 1, 2014, the Government of Puerto Rico approved an amendment to the Internal Revenue Code, which, among other things, changed the income tax rate for capital gains from 15% to 20%. As a result, the Corporation recognized an income tax expense of $20.0 million, mainly related to the deferred tax liability associated with the portfolio acquired from Westernbank.     [4] The FDIC indemnity asset amortization included a positive adjustment of $15.0 million to reverse the impact of accelerated amortization expense recorded in prior periods. Refer to Non-Interest section for further details.       Quarter ended (Unaudited) 30-Jun-14 (In thousands)  

Actual Results(US GAAP)

 

TARP repaymentdiscountamortization andIncome Taxadjustments [2]

 

BPNAReorganization [3]

 

Adjusted Results(Non-GAAP)

Net interest (expense) income $ (59,381 )   $ (414,068 )   $ -   $ 354,687 Provision for loan losses – non-covered loans 50,074 - - 50,074 Provision for loan losses – covered loans [1]     11,604       -       -       11,604   Net interest (expense) income after provision for loan losses (121,059 ) (414,068 ) - 293,009 FDIC loss share expense (55,261 ) - - (55,261 ) Other non-interest income 118,050 - - 118,050 Restructuring costs 4,574 - 4,574 - Other operating expenses     270,865       -       -       270,865   (Loss) income from continuing operations before income tax (333,709 ) (414,068 ) (4,574 ) 84,933 Income tax (benefit) expense     (4,124 )     (14,524 )     -       10,400   (Loss) income from continuing operations $ (329,585 ) $ (399,544 ) $ (4,574 ) $ 74,533 (Loss) income from discontinued operations, net of tax   $ (181,729 )   $ -     $ (193,363 )   $ 11,634   Net (loss) income   $ (511,314 )   $ (399,544 )   $ (197,937 )   $ 86,167   [1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.   [2] Income tax adjustments include a benefit of approximately $23.4 million related to a Closing Agreement with the PR Department of Treasury, completed during the second quarter of 2014 and the negative impact of the deferred tax asset valuation allowance of approximately $8.9 million recorded at the Holding Company, due to the difference in the tax treatment of the interest expense related to the TARP funds and the newly issued $450 million senior notes. Refer to Income taxes section for further details.   [3] Adjustments included within Loss from discontinued operations include approximately $186.5 million of goodwill impairment charge and $6.9 million in transaction costs, which include severance payment expenses, legal and other professional services, incurred in connection with the agreements to sell the U.S. regional operations. Refer to Table P for a detail of the net loss from discontinued operations. Adjustments within operating expenses are related to restructuring charges incurred in connection with the reorganization of PCB. Refer to Table Q for a detail of restructuring charges.       Quarters ended (Unaudited)   Adjusted Results Non-GAAP   (In thousands)   30-Sep-14   30-Jun-14 Variance Net interest income $ 347,084 $ 354,687 $ (7,603 ) Provision for loan losses – non-covered loans 56,216 50,074 6,142 Provision for loan losses – covered loans [1]     12,463     11,604     859   Net interest income after provision for loan losses 278,405 293,009 (14,604 ) FDIC loss share expense (19,910 ) (55,261 ) 35,351 Other non-interest income 129,194 118,050 11,144 Restructuring costs - - - Other operating expenses     302,350     270,865     31,485   Income from continuing operations before income tax 85,339 84,933 406 Income tax expense     3,610     10,400     (6,790 ) Income from continuing operations $ 81,729 $ 74,533 $ 7,196 Income from discontinued operations, net of tax     8,809     11,634   $ (2,825 ) Net income (loss)   $ 90,538   $ 86,167   $ 4,371   [1] Covered loans represent loans acquired in the Westernbank FDIC-assisted transaction that are covered under FDIC loss sharing agreements.  

Net interest income

For the quarter ended September 30, 2014, the Corporation had a net interest income of $326.4 million and an adjusted net interest income of $347.1 million, excluding the impact of the $20.7 million expense related to the refinancing of structured repos, compared to a net interest expense of $59.4 million for the previous quarter. Excluding the impact of the accelerated amortization of the discount and deferred costs of $414.1 million associated with the TARP trust preferred securities, net interest income was $354.7 million, for the second quarter of 2014. Net interest margin was 4.36% for the third quarter of 2014, compared to (0.77%) for the previous quarter. Adjusted net interest margin was 4.64%, compared to 4.68% for the second quarter of 2014. The main drivers of the adjusted decrease in the net interest income of $7.6 million, or four basis points, were:

• A decrease of $14.7 million, or one hundred and eighty eight basis points, in income from the covered loans portfolio, mainly related to the $7.6 million impact of a change in the estimated life of certain commercial loans resulting in an extension of the period in which the accretion of income will be recorded. Although the total estimated cash flows for the life of these loans increased, the nominal interest income was reduced for each reporting period, thus lowering the yield. Also, a loan resolution during the second quarter of 2014 resulted in a one-time benefit of approximately $4.9 million in that quarter. Refer to Table O for schedule of the accretable yield for covered loans accounted for under ASC 310-30.
• A decrease of $2.6 million, or six basis points, in income from commercial loans, due mainly to lower volume of loans at BPPR principally related to the repayment of certain government lines of credit, partially offset by the impact of one more day during the third quarter of 2014, compared to the previous quarter.
• A decrease of $12.9 million, or one hundred and forty three basis points, on interest expense on borrowings, mainly related to the lower yield on the 7% Senior Notes issued on July 1, 2014, to partially fund the repayment of TARP funds, as compared to the 16% yield on the TARP funds incurred during the previous quarter.

BPPR’s net interest margin was 5.25%, a decrease of twenty five basis points from the previous quarter. Net interest income amounted to $315.7 million for the quarter ended September 30, 2014, compared with $334.0 million for the previous quarter. The decrease in the net interest income was mainly due to the above mentioned decrease in interest income from covered loans and lower volume of commercial loans.

BPNA earned $26.4 million in net interest income for the quarter ended September 30, 2014. Excluding the impact of the repos refinancing, the net interest income was $47.1 million, compared with $48.7 million in the previous quarter. Net interest margin was 1.82% for the quarter. The adjusted net interest margin for the quarter was 3.23%, compared to 3.25% in the previous quarter. The decrease in net interest income was mostly the result of a lower volume of mortgage loans due to portfolio amortization and lower yield on commercial loans.

Non-interest income

Non-interest income was $124.3 million for the third quarter of 2014, an increase of $61.5 million when compared with the second quarter. The FDIC indemnity asset amortization for the third quarter of 2014 included a benefit of approximately $15.0 million to reverse the impact of accelerated amortization expense recorded in prior periods. This amount will be recognized as expense over the remaining portion of the Loss Sharing Agreement that expires in the quarter ending June 30, 2015. Excluding this impact, non-interest income increased by $46.5 million compared to the second quarter of 2014, driven primarily by the following items:

• Lower FDIC loss-share expense by $35.4 million, driven by lower amortization of the indemnification asset by $29.6 million due to the impact of the reduction in expected losses of $102.9 million during the second quarter of 2014 which resulted in a significant increase in the amortization during such quarter; higher mirror accounting on reimbursable expenses by $4.5 million due to higher OREO expenses, including write-downs and sales of covered OREO properties, and a positive variance in the fair value adjustment of the true-up payment obligation. See additional details about covered portfolio and FDIC indemnity asset in Table O.
• Higher mortgage banking activities income by $10.6 million due to lower realized losses of $5.7 million on closed derivatives positions and lower unfavorable valuation adjustments on mortgage servicing rights of $5.2 million at the BPPR segment. Refer to Table F for details of mortgage banking activities.
• Higher net gain on sale of loans, including valuation adjustments on loans held-for-sale by $5.9 million due to commercial NPL’s sales at BPPR and BPNA segments, as part of workout activities.

These positive variances were partially offset by:

• Higher provision for loans sold with credit recourse by $2.0 million.
• Lower other service fees by $1.6 million mostly due to lower sale and administration fees at the broker dealer business due to lower transaction volumes in the third quarter. Refer to Table F for a breakdown of other service fees.
• Net losses on investment securities by $1.8 million due to the sale of securities available for sale at BPNA segment.

Refer to Table B for further details.

Financial Impact of FDIC-Assisted Transaction           (Unaudited)   Quarters ended Nine months ended (In thousands)   30-Sep-14   30-Jun-14   30-Sep-13 30-Sep-14   30-Sep-13  

Income Statement

Interest income on covered loans $ 68,251 $ 82,975 $ 71,631 $ 232,324 $ 213,952 Total FDIC loss share expense (4,864 ) (55,261 ) (14,866 ) (84,331 ) (44,887 ) Other non-interest income - - 109 - 593 Provision for loan losses     12,463       11,604       17,433     49,781       60,489   Total revenues less provision for loan losses   $ 50,924     $ 16,110     $ 39,441   $ 98,212     $ 109,169    

Balance Sheet

Loans covered under loss-sharing agreements with FDIC $ 2,654,263 $ 2,736,102 $ 3,076,009 FDIC loss share asset 681,106 751,553 1,324,711 FDIC true-up payment obligation     126,473       127,551       124,092  

See additional details on accounting for FDIC-Assisted transaction in Table O.

Operating expenses

Operating expenses increased by $35.2 million when compared with the second quarter of 2014. Excluding the impact of the significant events related to the BPNA reorganization, operating expenses increased by $31.5 million compared to the second quarter of 2014, driven primarily by:

• Higher other real estate owned (OREO) expenses by $16.3 million, mainly due to higher losses on sales of OREOs at BPPR by $5.6 million largely related to several auctions of OREO properties as part of the Corporation’s resolution strategies, higher write-downs on mortgage and commercial properties, and an increase in property tax payments.
• Higher other operating expenses by $9.9 million, due to higher provision for unused commitments in BPPR by $5.5 million mainly for credit cards and higher sundry reserve expense that had benefited from reserve release in Q2 mainly at BPNA.
• Higher personnel cost by $5.4 million, mainly due to higher salaries as a result of accrued salaries for additional work hours, incentives, and medical insurance related expenses during the quarter.
• Higher other operating taxes by $1.8 million, mainly due to higher personal property tax.

These increases were partially offset by:

• Lower business promotion expense by $3.0 million, mainly due to lower fees from advertising agencies due to seasonality of marketing campaigns.

Non-personnel credit-related costs, which include collections, appraisals, credit related fees, and OREO expenses, amounted to $25.8 million for the third quarter of 2014, compared with $10.1 million for the second quarter of 2014. The increase was principally due to higher losses on sales of OREO’s and higher write-downs on mortgage and commercial properties at BPPR, discussed above.

Full-time equivalent employees (“FTEs”), including discontinued operations, were 7,848 as of September 30, 2014, compared with 8,032 as of June 30, 2014, and 8,094 as of September 30, 2013.

For a breakdown of operating expenses by category refer to table B.

Income taxes

Income tax expense amounted to $26.7 million for the third quarter of 2014, compared to a benefit of $4.1 million for the previous quarter.

On July 1, 2014, the Government of Puerto Rico approved an amendment to the Internal Revenue Code, which, among other things, changed the income tax rate for capital gains from 15% to 20%. As a result, the Corporation recognized an income tax expense of approximately $20.0 million during the third quarter of 2014, mainly related to the deferred tax liability associated with the portfolio acquired from Westernbank. On an adjusted basis, the income tax provision amounted to $3.6 million, compared to $10.4 million for the previous quarter.

During the third quarter of 2014, the Corporation recorded a favorable adjustment of approximately $6.1 million in connection with filing its tax returns for the year 2013. Also, the Corporation reversed approximately $3.6 million of reserves for uncertain tax positions due to the expiration of the statute of limitations in the Puerto Rico operations. Excluding these adjustments, the adjusted income tax expense would have been $13.3 million, for an effective tax rate of approximately 16% on the adjusted pre-tax income.

Credit Quality

The following table presents non-performing assets information:

      Non-Performing Assets (Unaudited) (In thousands)   30-Sep-14   30-Jun-14   30-Sep-13 Total non-performing loans held-in-portfolio, excluding covered loans $ 621,945 $ 639,735 $ 617,573 Non-performing loans held-for-sale 19,728 4,426 2,099 Other real estate owned (“OREO”), excluding covered OREO     135,256       139,420       135,502   Total non-performing assets, excluding covered assets 776,929 783,581 755,174 Covered loans and OREO     166,533       171,955       190,554   Total non-performing assets   $ 943,462     $ 955,536     $ 945,728   Net charge-offs for the quarter (excluding covered loans)   $ 40,469     $ 46,201     $ 57,892       Ratios (excluding covered loans):             Non-covered loans held-in-portfolio (1) $ 19,359,216 $ 19,635,224 $ 21,427,183 Non-performing loans held-in-portfolio to loans held-in-portfolio (1) 3.21 % 3.26 % 2.88 % Allowance for loan losses to loans held-in-portfolio 2.69 2.68 2.46 Allowance for loan losses to non-performing loans, excluding loans held-for-sale     83.88       82.26       85.19   [1] During the quarter ended June 30, 2014 approximately $1.8 billion in loans held-in-portfolio were reclassified to the discontinued operations, of which $9.5 million were in non-performing status as of June 30, 2014 and $48 thousand were in non-performing status as of September 30, 2014.   Refer to Table H for additional information.             Provision for Loan Losses   (Unaudited)   Quarters ended Nine months ended (In thousands)   30-Sep-14   30-Jun-14   30-Sep-13 30-Sep-14 30-Sep-13 Provision (reversal) for loan losses - non-covered loans: BPPR $ 61,868 $ 74,860 $ 50,475 $ 190,643 $ 485,228 BPNA     6,298     (24,786 )     (1,760 )   (18,281 )   1,555 Total provision for loan losses - non-covered loans     68,166     50,074       48,715       172,362     486,783 Provision for loan losses - covered loans     12,463     11,604       17,433     49,781     60,489 Total provision for loan losses   $ 80,629   $ 61,678     $ 66,148   $ 222,143   $ 547,272  

Credit Quality

The Corporation’s asset quality generally continued to improve during the third quarter of 2014, as evidenced by declines in both non-performing loans (“NPLs”) and net charge-offs (“NCOs”). The BPNA segment continued to reflect strong credit quality led by the improved risk profile of its loan portfolios, further strengthened by the divesture and reclassification to discontinued operations of its regional operations in California, Illinois and Central Florida as well as certain legacy and classified assets. In the BPPR segment, stable trends continued during the quarter, but the Corporation continues to monitor potential risks associated with Puerto Rico’s economic and fiscal conditions.

The following presents credit quality performance for the third quarter of 2014 for the Corporation’s non-covered portfolios. Unless otherwise noted, all credit metrics for the third quarter of 2014 are from continuing operations.

• Inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by $23.8 million, or 15.7%, from the previous quarter, mainly driven by improvements in the BPPR and BPNA segments of $17.5 million and $6.3 million, respectively.
• Non-performing loans held-in-portfolio decreased by $17.8 million, or 2.8%, during the quarter ended September 30, 2014, mainly driven by a $36.2 million decline in the BPNA segment. The decline in the BPNA segment was mostly related to loans sold or transferred to held-for-sale as part of the US operations reorganization, which includes the sale of certain classified and legacy loans and to commercial NPL resolutions. This reduction was in part offset by an increase of $18.4 million in the BPPR segment, mostly driven by higher mortgage NPLs. At September 30, 2014, NPLs represented 3.2% of total loans held-in-portfolio, compared to 3.3% at June 30, 2014.
• Excluding the $32.3 million write-down related to the U.S. legacy and classified bulk loan sales of approximately $220.7 million, net charge-offs for the third quarter of 2014 totaled $40.5 million, or an annualized 0.83% of average non-covered loans held-in-portfolio, compared to $46.2 million, or 0.94%, in the second quarter of 2014. The decrease of $5.7 million was primarily driven by a $4.7 million decline in the BPPR segment, mostly due to higher commercial recoveries. Refer to Table J for further information on net charge-offs and related ratios.
• The allowance for loan losses decreased by $4.6 million from the second quarter of 2014, mainly driven by a $27.7 million reduction release in BPNA, prompted primarily by the aforementioned write-downs due to the reclassification to loans held-for-sale of certain portfolios, and continued improvements in the BPNA’s loan portfolio risk profile. This reduction was in part offset by a $23.2 million allowance increase in the BPPR segment driven by qualitative factors adjustments, which reflect challenging macroeconomic conditions in Puerto Rico. The general and specific reserves related to non-covered loans totaled $389.7 million and $132.0 million, respectively, at quarter-end, compared with $405.2 million and $121.0 million, respectively, as of June 30, 2014. The ratio of the allowance for loan losses to loans held-in-portfolio stood at 2.69% in the third quarter of 2014, compared to 2.68% in the previous quarter.
• The provision for loan losses for the third quarter of 2014 totaled $68.2 million, increasing by $18.1 million from the second quarter of 2014. This increase reflects a $12.0 million impact related to the above mentioned bulk sales and transfer of certain BPNA loans to held-for-sale, as these loans required a $32.3 million write-down and carried $20.3 million in reserves. Excluding the effect of the loans sales and transfers to held-for-sale, the provision for the third quarter amounted to $56.2 million, an increase of $6.1 million compared with the previous quarter.

  Credit Quality by Segment   (Unaudited)       (In thousands)   Quarters ended   BPPR   30-Sep-14   30-Jun-14   30-Sep-13   Provision for loan losses $ 61,868 $ 74,860 $ 50,475 Net charge-offs 38,682 43,335

44,678

[1]

Total non-performing loans held-in-portfolio, excluding covered loans 592,229 573,806 441,253 Allowance / non-covered loans held-in-portfolio   3.09 %     2.94 %     2.55 %       Quarters ended   BPNA   30-Sep-14   30-Jun-14   30-Sep-13   Provision for loan losses (reversal of provision) - Continuing operations $ 6,298 $ (24,786 ) $ (1,760 ) Provision for loan losses (reversal of provision) - Discontinued operations - - 6,515 Net charge-offs (recoveries) - Continuing operations 1,787 2,866 7,183 Net charge-offs (recoveries) - Discontinued operations - - 6,031 Total non-performing loans held-in-portfolio 29,716 65,929 176,320 Allowance / non-covered loans held-in-portfolio     0.91 %     1.59 %     2.20 %  

BPPR Segment

• Inflows of NPLs held-in-portfolio, excluding consumer loans, decreased by $17.5 million, or 12.9%, from the second quarter of 2014, reflective of lower commercial and mortgage inflows of $6.7 million and $9.9 million, respectively.
• Total NPLs held-in-portfolio increased by $18.4 million from the second quarter of 2014, mainly driven by higher mortgage and consumer NPLs of $21.1 million and $8.5 million, respectively, partially offset by lower commercial NPLs of $9.1 million. Consumer NPL increase was mostly due to the reclassification from the mortgage portfolio of approximately $6.8 million in home equity loans. Sequentially, both the commercial and consumer portfolios showed stable credit quality trends, while mortgage NPLs continued to increase. At September 30, 2014, NPLs represented 3.7% of total loans held-in-portfolio, compared to 3.6% in the second quarter.
• Net charge-offs were $38.7 million, decreasing by $4.7 million from the second quarter of 2014, primarily reflecting a reduction of $8.3 million in the commercial NCOs largely stemming from higher recoveries, coupled with lower losses, offset by higher residential mortgage NCOs of $3.4 million. The ratio of net charge-offs to average loans held-in-portfolio decreased to 0.98% on an annualized basis from 1.09% in the previous quarter.
• The allowance for loan losses increased by $23.2 million from the second quarter of 2014. Consistent with prior quarters, the increase in the allowance was mainly prompted by qualitative factors adjustments, reflective of the challenging macroeconomic conditions that persist in Puerto Rico. The allowance for loan losses as a percentage of loans held-in-portfolio increased to 3.09% from 2.94% in the second quarter of 2014.
• The provision for loan losses for the third quarter of 2014 amounted to $61.9 million, decreasing by $13.0 million from the previous quarter. This decrease was predominantly driven by lower net charge-offs during the third quarter of 2014.

BPNA Segment

• Total NPLs held-in-portfolio decreased by $36.2 million, or 54.9%, from the second quarter of 2014. This decrease was primarily driven by a reduction in mortgage and consumer NPLs of $12.3 million and $4.6 million, respectively, mainly as a result of the previously mentioned legacy and classified bulk loan sales for an aggregate of approximately $220.7 million, and a $16.7 million reduction in commercial NPLs mostly due to loan resolutions. Total inflows of non-performing loans held-in-portfolio, excluding consumer loans, decreased by $6.3 million, or 40.1%, from the second quarter of 2014. At September 30, 2014, NPLs represented 0.84% of total loans held-in-portfolio, compared to 1.7% in the second quarter.
• Excluding the $32.3 million write-down related to US classified and legacy assets, net charge-offs amounted to $1.8 million, essentially flat from the previous quarter of 2014. The ratio of net charge-offs to average loans held-in-portfolio was 19 basis points on an annualized basis, compared to 30 basis points in the previous quarter.
• The allowance for loan losses decreased by $27.7 million from the second quarter of 2014, primarily reflective of a $20.3 million write-down associated with the loans sold or transferred to loans held-for- sale, and continuous credit quality improvements. The allowance for loan losses as a percentage of loans held-in-portfolio decreased to 0.91% from 1.59% in the previous quarter.
• The provision for loan losses in the third quarter of 2014 amounted to $6.3 million, compared to a provision release of $24.8 million in the second quarter. Excluding the effect of the classified and legacy assets transactions, the provision for the third quarter amounted to a provision release of $5.7 million.

  Financial Condition Highlights       (Unaudited)     (In thousands)   30-Sep-14   30-Jun-14   30-Sep-13 Money market, trading and investment securities $ 7,200,291 $ 7,949,164 $ 6,776,473 Loans not covered under loss sharing agreements with the FDIC 19,359,216 19,635,224 21,427,183 Loans covered under loss sharing agreements with the FDIC 2,654,263 2,736,102 3,076,009 Assets from discontinued operations 1,129,053 1,828,382 - Total assets 34,099,095 36,587,902 36,052,116 Deposits 24,466,105 24,901,152 26,395,054 Borrowings 3,375,485 4,465,965 4,164,104 Liabilities from discontinued operations 1,106,762 2,079,742 - Total liabilities 29,800,703 32,327,461 31,658,231 Stockholders’ equity     4,298,392     4,260,441     4,393,885  

Total assets decreased by $2.5 billion from the second quarter of 2014, driven by:

• A decrease of $699.3 million in assets from discontinued operations as the Corporation completed the sales of the Central Florida and Illinois regional operations. Refer to Table P.
• A decrease of $657.5 million in other assets due to the reduction of trade receivables of $441.6 million, net of transaction costs, recorded during the second quarter in connection with the issuance of the 7% Senior Notes used to partially fund the repayment of TARP funds, and the sale of the Corporation’s Bank Owned Life Insurance assets at BPNA, which had a balance of approximately $230.6 million as of the end of the second quarter.
• A decrease of $613.8 million in money market investments as the Corporation had built up liquidity at the end of the second quarter in anticipation of the repayment of TARP funds and the impact of the U.S. regional sales.
• A decrease of $200.5 million in trading account securities due to sales of mortgage backed securities at BPPR.
• A decrease of $275.6 million in non-covered loans held-in-portfolio, mainly at BPNA, due to the bulk sales and reclassification of loans held for sale of classified and legacy mortgage and commercial loans for an aggregate of approximately $220.7 million.
• The covered loan portfolio decreased by $81.8 million due to the continuation of loan resolutions and the normal portfolio run-off.
• A decrease of $70.5 million in FDIC loss share asset mainly due to collections and the amortization of the asset, as detailed in Table O.

These decreases were partially offset by:

• An increase in loans held for sale of $81.0 million, mainly at BPNA due to the reclassification of $105.0 million of commercial and residential mortgage loans related to definitive agreements for bulk sales of loans to be completed during the fourth quarter of 2014.
• An increase in investment securities available for sale of $73.8 million due to the purchase of US Treasuries at the BPPR segment, offset in part by sales of mortgage backed securities and CMOs at the BPNA segment.

Total liabilities decreased by $2.5 billion from the second quarter of 2014, driven by:

• A decrease of $973.0 million in liabilities from discontinued operations as the corporation completed the sales of the Central Florida and Illinois regional operations. Refer to Table P.
• A decrease of $636.5 million in notes payable due to the repayment of TARP Capital Purchase Program funds to the U.S. Treasury Department of $935 million, partially offset by an increase of $300.0 million in Advances from the Federal Home Loan Bank of NY.
• A decrease of $424.0 million in federal funds purchased and assets sold under agreements to repurchase mainly due to a reduction of $250.0 million of federal funds purchased by BPPR, and net decreases in assets sold under agreements to repurchase of $174.0 million.
• A decrease of $435.0 million in total deposits, mainly due to a reduction of $268.3 million in higher cost and brokered deposits at BPNA and a reduction of $156.8 million at BPPR, mainly due to non-interest bearing deposits in trust received near the end of the second quarter to repay principal and interest of government bond issuances. Refer to Table G for the composition of deposits.

Stockholders’ equity increased by $37.9 million from the second quarter of 2014, mainly as a result of the net income for the quarter of $62.6 million, partially offset by an increase of $19.8 million in net unrealized loss on investment securities available-for-sale. Refer to Table G for capital ratios.

Refer to Table C for the Statements of Financial Condition.

Forward-Looking Statements

The information included in this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in forward-looking statements. Factors that might cause such a difference include, but are not limited to (i) the rate of growth in the economy and employment levels, as well as general business and economic conditions; (ii) changes in interest rates, as well as the magnitude of such changes; (iii) the fiscal and monetary policies of the federal government and its agencies; (iv) changes in federal bank regulatory and supervisory policies, including required levels of capital and the impact of proposed capital standards on our capital ratios; (v) the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on our businesses, business practices and cost of operations; (vi) regulatory approvals that may be necessary to undertake certain actions or consummate strategic transactions such as acquisitions and dispositions; (vii) the relative strength or weakness of the consumer and commercial credit sectors and of the real estate markets in Puerto Rico and the other markets in which borrowers are located; (viii) the performance of the stock and bond markets; (ix) competition in the financial services industry; (x) additional Federal Deposit Insurance Corporation assessments; and (xi) possible legislative, tax or regulatory changes. For a discussion of such factors and certain risks and uncertainties to which the Corporation is subject, see the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013, as well as its filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, the Corporation assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

Founded in 1893, Popular, Inc. is the leading banking institution by both assets and deposits in Puerto Rico and ranks among the top 50 U.S. banks by assets. In the United States, Popular has established a community-banking franchise providing a broad range of financial services and products with branches in New York, New Jersey, Florida and California.

An electronic version of this press release can be found at the Corporation’s website: www.popular.com.

Popular will hold a conference call to discuss the financial results today Wednesday, October 22, 2014 at 10:30 a.m. Eastern Standard Time. The call will be broadcast live over the Internet and can be accessed through the investor relations section of the Corporation’s website: www.popular.com.

Listeners are recommended to go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call may also be accessed through a dial-in telephone number 1-866-235-1201 or 1-412-902-4127.

A replay of the webcast will be archived in Popular’s website. A telephone replay will be available one hour after the end of the conference call through Thursday, October 30, 2014. The replay dial in is 1-877-344-7529 or 1-412-317-0088. The replay passcode is 10052964.

  Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release   Table A - Selected Ratios and Other Information   Table B - Consolidated Statement of Operations   Table C - Consolidated Statement of Financial Condition   Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER   Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE   Table F - Mortgage Banking Activities and Other Service Fees   Table G - Loans and Deposits   Table H - Non-Performing Assets   Table I - Activity in Non-Performing Loans   Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios   Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED   Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS   Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS   Table N - Reconciliation to GAAP Financial Measures   Table O - Financial Information - Westernbank Covered Loans   Table P - Financial Information from Discontinued Operations   Table Q - Restructuring Charges     POPULAR, INC. Financial Supplement to Third Quarter 2014 Earnings Release Table A - Selected Ratios and Other Information (Unaudited)                         Quarters ended Nine months ended     30-Sep-14   30-Jun-14   30-Sep-13   30-Sep-14   30-Sep-13 Basic EPS from continuing operations $ 0.31 $ (3.21 ) $ 2.18 $ (2.27 ) $ 3.94 Basic EPS from discontinued operations $ 0.29 $ (1.77 ) $ 0.04 $ (1.28 ) $ 0.28 Total Basic EPS $ 0.60 $ (4.98 ) $ 2.22 $ (3.55 ) $ 4.22 Diluted EPS from continuing operations $ 0.31 $ (3.21 ) $ 2.18 $ (2.27 ) $ 3.93 Diluted EPS from discontinued operations $ 0.29 $ (1.77 ) $ 0.04 $ (1.28 ) $ 0.28 Total Diluted EPS $ 0.60 $ (4.98 ) $ 2.22 $ (3.55 ) $ 4.21 Average common shares outstanding 102,953,328 102,781,438 102,714,262 102,845,402 102,666,570 Average common shares outstanding - assuming dilution 103,152,916 102,781,438 103,017,443 102,845,402 103,014,674 Common shares outstanding at end of period 103,448,206 103,472,979 103,327,146 103,448,206 103,327,146   Market value per common share $ 29.44 $ 34.18 $ 26.25 $ 29.44 $ 26.25   Market capitalization - (In millions) $ 3,046 $ 3,537 $ 2,712 $ 3,046 $ 2,712   Return on average assets 0.71 % (5.66 )% 2.51 % (1.35 )% 1.60 %   Return on average common equity 5.75 % (43.04 )% 21.64 % (10.68 )% 14.38 %   Net interest margin [2] 4.64 % 4.68 % 4.46 % 4.67 % 4.44 %   Common equity per share $ 41.07 $ 40.69 $ 42.04 $ 41.07 $ 42.04   Tangible common book value per common share (non-GAAP) [1] $ 36.24 $ 35.84 $ 35.32 $ 36.24 $ 35.32   Tangible common equity to tangible assets (non-GAAP) [1] 11.16 % 10.28 % 10.32 % 11.16 % 10.32 %   Tier 1 risk-based capital [3] 16.93 % 19.23 % 18.54 % 16.93 % 18.54 %   Total risk-based capital [3] 18.20 % 20.69 % 19.82 % 18.20 % 19.82 %   Tier 1 leverage [3] 11.14 % 13.07 % 12.26 % 11.14 % 12.26 %   Tier 1 common equity to risk-weighted assets (non-GAAP) [1] [3]     14.79 %     13.51 %     14.20 %     14.79 %     14.20 % [1] Refer to Table N for Non-GAAP reconciliations.   [2] Not on a taxable equivalent basis. For the quarter ended September 30, 2014, excludes the impact of the $20.7 million fees related to repos refinancing. For the quarter ended June 30, 2014, excludes the impact of the $414.1 million TARP discount amortization. US GAAP Net interest margin was 4.36% for the third quarter, compared to (0.77)% for the previous quarter. Refer to Tables D & E for reconciliation.   [3] Capital ratios for the current quarter are estimated.     POPULAR, INC. Financial Supplement to Third Quarter 2014 Earnings Release Table B - Consolidated Statement of Operations (Unaudited)   Quarters ended   Variance   Quarter ended   Variance   Nine months ended (In thousands, except per share information)   30-Sep-14   30-Jun-14  

Q3 2014vs.Q2 2014

  30-Sep-13  

Q3 2014vs.Q3 2013

  30-Sep-14   30-Sep-13 Interest income:     Loans $ 362,592 $ 380,986 $ (18,394 ) $ 366,267 $ (3,675 ) $ 1,121,180 $ 1,097,081 Money market investments 1,007 1,131 (124 ) 848 159 3,111 2,632 Investment securities 33,154 33,989 (835 ) 33,561 (407 ) 102,270 107,490 Trading account securities     4,446       5,344       (898 )     5,242       (796 )     15,047       16,212   Total interest income     401,199       421,450       (20,251 )     405,918       (4,719 )     1,241,608       1,223,415   Interest expense: Deposits 26,533 26,223 310 29,115 (2,582 ) 79,614 96,176 Short-term borrowings 28,955 8,892 20,063 9,563 19,392 46,887 29,111 Long-term debt     19,290       445,716       (426,426 )     36,228       (16,938 )     496,896       108,061   Total interest expense     74,778       480,831       (406,053 )     74,906       (128 )     623,397       233,348   Net interest income (expense) 326,421 (59,381 ) 385,802 331,012 (4,591 ) 618,211 990,067 Provision for loan losses - non-covered loans 68,166 50,074 18,092 48,715 19,451 172,362 486,783 Provision for loan losses - covered loans     12,463       11,604       859       17,433       (4,970 )     49,781       60,489   Net interest income (expense) after provision for loan losses     245,792       (121,059 )     366,851       264,864       (19,072 )     396,068       442,795   Service charges on deposit accounts 40,585 39,237 1,348 40,517 68 119,181 123,056 Other service fees 54,839 56,468 (1,629 ) 57,041 (2,202 ) 164,125 169,264 Mortgage banking activities 14,402 3,788 10,614 18,892 (4,490 ) 21,868 57,270 Net (loss) gain and valuation adjustments on investment securities (1,763 ) - (1,763 ) - (1,763 ) (1,763 ) 5,856 Trading account profit (loss) 740 1,055 (315 ) (6,607 ) 7,347 3,772 (11,936 ) Net gain (loss) on sale of loans, including valuation adjustments on loans held-for-sale 15,593 9,659 5,934 2,374 13,219 29,645 (56,054 ) Adjustments (expense) to indemnity reserves on loans sold (9,480 ) (7,454 ) (2,026 ) (2,387 ) (7,093 ) (27,281 ) (30,162 ) FDIC loss share (expense) income (4,864 ) (55,261 ) 50,397 (14,866 ) 10,002 (84,331 ) (44,887 ) Other operating income     14,278       15,297       (1,019 )     191,745       (177,467 )     57,935       393,330   Total non-interest income     124,330       62,789       61,541       286,709       (162,379 )     283,151       605,737   Operating expenses: Personnel costs Salaries 71,166 69,149 2,017 70,474 692 209,353 206,681 Commissions, incentives and other bonuses 14,738 12,862 1,876 14,060 678 40,699 43,537 Pension, postretirement and medical insurance 9,282 7,532 1,750 13,744 (4,462 ) 25,515 41,968 Other personnel costs, including payroll taxes     9,356       9,557       (201 )     10,074       (718 )     32,376       30,106   Total personnel costs 104,542 99,100 5,442 108,352 (3,810 ) 307,943 322,292 Net occupancy expenses 21,203 20,267 936 21,386 (183 ) 62,830 62,937 Equipment expenses 12,370 12,044 326 11,387 983 35,826 34,492 Other taxes 15,369 13,543 1,826 17,680 (2,311 ) 42,575 44,433 Professional fees 67,649 67,024 625 69,237 (1,588 ) 201,672 203,989 Communications 6,455 6,425 30 6,290 165 19,565 19,236 Business promotion 13,062 16,038 (2,976 ) 14,809 (1,747 ) 40,486 42,751 FDIC deposit insurance 9,511 10,480 (969 ) 15,143 (5,632 ) 30,969 42,056 Loss on early extinguishment of debt - - - 3,388 (3,388 ) - 3,388 Other real estate owned (OREO) expenses 19,745 3,410 16,335 16,632 3,113 29,595 70,156 Credit and debit card processing, volume, interchange and other expenses 5,659 5,640 19 4,816 843 16,495 14,617 Other operating expenses 24,759 14,869 9,890 17,182 7,577 56,781 51,065 Amortization of intangibles 2,026 2,025 1 1,990 36 6,077 5,969 Restructuring costs     8,290       4,574       3,716       -       8,290       12,864       -   Total operating expenses     310,640       275,439       35,201       308,292       2,348       863,678       917,381   Income (loss) from continuing operations before income tax 59,482 (333,709 ) 393,191 243,281 (183,799 ) (184,459 ) 131,151 Income tax expense (benefit)     26,667       (4,124 )     30,791       17,768       8,899       45,807       (276,489 ) Income (loss) from continuing operations 32,815 (329,585 ) 362,400 225,513 (192,698 ) (230,266 ) 407,640 Income (loss) from discontinued operations, net of tax     29,758       (181,729 )     211,487       3,622       26,136       (132,066 )     28,656   Net income (loss)   $ 62,573     $ (511,314 )   $ 573,887     $ 229,135     $ (166,562 )   $ (362,332 )   $ 436,296   Net income (loss) applicable to common stock   $ 61,643     $ (512,245 )   $ 573,888     $ 228,204     $ (166,561 )   $ (365,124 )   $ 433,504   Net income (loss) per common share - basic: Net income (loss) from continuing operations $ 0.31 $ (3.21 ) $ 3.52 $ 2.18 $ (1.87 ) $ (2.27 ) $ 3.94 Net income (loss) from discontinued operations   $ 0.29     $ (1.77 )   $ 2.06     $ 0.04     $ 0.25     $ (1.28 )   $ 0.28   Net income (loss) per common share - basic   $ 0.60     $ (4.98 )   $ 5.58     $ 2.22     $ (1.62 )   $ (3.55 )   $ 4.22   Net income (loss) per common share - diluted: Net income (loss) from continuing operations $ 0.31 $ (3.21 ) $ 3.52 $ 2.18 $ (1.87 ) $ (2.27 ) $ 3.93 Net income (loss) from discontinued operations   $ 0.29     $ (1.77 )   $ 2.06     $ 0.04     $ 0.25     $ (1.28 )   $ 0.28   Net income (loss) per common share - diluted   $ 0.60     $ (4.98 )   $ 5.58     $ 2.22     $ (1.62 )   $ (3.55 )   $ 4.21     Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table C - Consolidated Statement of Financial Condition (Unaudited)         Variance Q3 2014 vs. (In thousands)   30-Sep-14   30-Jun-14   30-Sep-13   Q2 2014 Assets: Cash and due from banks $ 321,914 $ 362,572 $ 368,590 $ (40,658 ) Money market investments 1,053,121 1,666,944 961,788 (613,823 ) Trading account securities, at fair value 145,343 345,823 338,848 (200,480 ) Investment securities available-for-sale, at fair value 5,727,766 5,653,992 5,136,618 73,774 Investment securities held-to-maturity, at amortized cost 112,893 114,280 140,355 (1,387 ) Other investment securities, at lower of cost or realizable value 161,168 168,125 198,864 (6,957 ) Loans held-for-sale, at lower of cost or fair value 178,008 97,010 124,532 80,998 Loans held-in-portfolio: Loans not covered under loss sharing agreements with the FDIC 19,450,677 19,726,234 21,520,054 (275,557 ) Loans covered under loss sharing agreements with the FDIC 2,654,263 2,736,102 3,076,009 (81,839 ) Less: Unearned income 91,461 91,010 92,871 451 Allowance for loan losses     611,375       624,911       642,928       (13,536 ) Total loans held-in-portfolio, net     21,402,104       21,746,415       23,860,264       (344,311 ) FDIC loss share asset 681,106 751,553 1,324,711 (70,447 ) Premises and equipment, net 497,111 492,382 519,623 4,729 Other real estate not covered under loss sharing agreements with the FDIC 135,256 139,420 135,502 (4,164 ) Other real estate covered under loss sharing agreements with the FDIC 151,382 155,805 159,968 (4,423 ) Accrued income receivable 116,746 119,520 122,881 (2,774 ) Mortgage servicing assets, at fair value 152,282 151,951 161,445 331 Other assets 1,634,819 2,292,360 1,803,478 (657,541 ) Goodwill 461,246 461,246 647,757 - Other intangible assets 37,777 40,122 46,892 (2,345 ) Assets from discontinued operations     1,129,053       1,828,382       -       (699,329 ) Total assets   $ 34,099,095     $ 36,587,902     $ 36,052,116     $ (2,488,807 ) Liabilities and Stockholders’ Equity: Liabilities: Deposits: Non-interest bearing $ 5,521,415 $ 5,666,685 $ 5,762,554 $ (145,270 ) Interest bearing     18,944,690       19,234,467       20,632,500       (289,777 ) Total deposits     24,466,105       24,901,152       26,395,054       (435,047 ) Federal funds purchased and assets sold under agreements to repurchase 1,650,712 2,074,676 1,793,208 (423,964 ) Other short-term borrowings 1,200 31,200 826,200 (30,000 ) Notes payable 1,723,573 2,360,089 1,544,696 (636,516 ) Other liabilities 852,351 880,602 1,099,073 (28,251 ) Liabilities from discontinued operations     1,106,762       2,079,742       -       (972,980 ) Total liabilities     29,800,703       32,327,461       31,658,231       (2,526,758 ) Stockholders’ equity: Preferred stock 50,160 50,160 50,160 - Common stock 1,036 1,035 1,034 1 Surplus 4,171,890 4,173,616 4,155,244 (1,726 ) Retained earnings 229,306 167,663 445,330 61,643 Treasury stock (3,933 ) (1,742 ) (877 ) (2,191 ) Accumulated other comprehensive loss     (150,067 )     (130,291 )     (257,006 )     (19,776 ) Total stockholders’ equity     4,298,392       4,260,441       4,393,885       37,951   Total liabilities and stockholders’ equity   $ 34,099,095     $ 36,587,902     $ 36,052,116     $ (2,488,807 )   Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table D - Consolidated Average Balances and Yield / Rate Analysis - QUARTER (Unaudited)                               Quarter ended Quarter ended Quarter ended Variance Variance 30-Sep-14 30-Jun-14 30-Sep-13 Q3 2014 vs. Q2 2014 Q3 2014 vs. Q3 2013 ($ amounts in millions; yields not on a taxable equivalent basis) Average balance Income / Expense Yield / Rate Average balance Income / Expense Yield / Rate Average balance Income / Expense Yield / Rate Average balance Income / Expense Yield / Rate Average balance Income / Expense Yield / Rate Assets: Interest earning assets: Money market, trading and investment securities $ 7,501   $ 38.6 2.06 % $ 7,839   $ 40.4   2.07   % $ 6,813   $ 39.7 2.32 %   ($338 )   ($1.8 ) (0.01 ) % $ 688     ($1.1 ) (0.26 ) % Loans not covered under loss sharing agreements with the FDIC: Commercial 8,239 99.6 4.80 8,446 102.2 4.86 8,332 102.6 4.88 (207 ) (2.6 ) (0.06 ) (93 ) (3.0 ) (0.08 ) Construction 201 2.5 4.86 175 2.4 5.55 313 3.7 4.68 26 0.1 (0.69 ) (112 ) (1.2 ) 0.18 Mortgage 6,646 84.0 5.05 6,691 85.3 5.10 6,633 81.7 4.93 (45 ) (1.3 ) (0.05 ) 13 2.3 0.12 Consumer 3,905 98.4 10.00 3,894 97.9 10.08 3,776 95.7 10.06 11 0.5 (0.08 ) 129 2.7 (0.06 ) Lease financing   545     9.8 7.20   546     10.2   7.43     537     10.9 8.08   (1 )   (0.4 ) (0.23 )   8     (1.1 ) (0.88 ) Total loans not covered under loss sharing agreements with the FDIC 19,536 294.3 5.99 19,752 298.0 6.05 19,591 294.6 5.98 (216 ) (3.7 ) (0.06 ) (55 ) (0.3 ) 0.01 Loans covered under loss sharing agreements with the FDIC   2,727     68.3 9.95   2,811     83.0   11.83     3,119     71.6 9.13   (84 )   (14.7 ) (1.88 )   (392 )   (3.3 ) 0.82   Total loans   22,263     362.6 6.48   22,563     381.0   6.77     22,710     366.2 6.41   (300 )   (18.4 ) (0.29 )   (447 )   (3.6 ) 0.07   Total interest earning assets   29,764   $ 401.2 5.36 %   30,402   $ 421.4   5.56   %   29,523   $ 405.9 5.47 %   (638 )   ($20.2 ) (0.20 ) %   241     ($4.7 ) (0.11 ) % Allowance for loan losses (629 ) (627 ) (603 ) (2 ) (26 ) Other non-interest earning assets 4,416 4,598 5,275 (182 ) (859 ) Assets from discontinued operations   1,473     1,863     1,979     (390 )   (506 ) Total average assets $ 35,024   $ 36,236   $ 36,174   $ (1,212 ) $ (1,150 )   Liabilities and Stockholders' Equity: Interest bearing deposits: NOW and money market $ 4,876 $ 3.9 0.32 % $ 4,897 $ 3.8 0.32 % $ 4,671 $ 3.4 0.29 % $ (21 ) $ 0.1 - % $ 205 $ 0.5 0.03 % Savings 6,740 3.7 0.22 6,713 3.6 0.22 6,615 3.5 0.21 27 0.1 - 125 0.2 0.01 Time deposits   7,569     18.9 0.99   7,709     18.8   0.98     7,701     22.2 1.14   (140 )   0.1   0.01     (132 )   (3.3 ) (0.15 ) Total interest bearing deposits 19,185 26.5 0.55 19,319 26.2 0.54 18,987 29.1 0.61 (134 ) 0.3 0.01 198 (2.6 ) (0.06 ) Borrowings[1]   3,591     27.6 3.06   3,614     40.5   4.49     4,403     45.8 4.15   (23 )   (12.9 ) (1.43 )   (812 )   (18.2 ) (1.09 ) Total interest bearing liabilities   22,776     54.1 0.94   22,933     66.7   1.17     23,390     74.9 1.28   (157 )   (12.6 ) (0.23 )   (614 )   (20.8 ) (0.34 ) Net interest spread 4.42 % 4.39   % 4.19 % 0.03   % 0.23   % Non-interest bearing deposits 5,464 5,451 5,386 13 78 Other liabilities 860 915 963 (55 ) (103 ) Liabilities from discontinued operations 1,618 2,113 2,200 (495 ) (582 ) Stockholders' equity   4,306     4,824     4,235     (518 )   71   Total average liabilities and stockholders' equity $ 35,024   $ 36,236   $ 36,174   $ (1,212 ) $ (1,150 )   Adjusted net interest income / margin non-taxable equivalent basis $ 347.1 4.64 % $ 354.7   4.68   % $ 331.0 4.46 %   ($7.6 ) (0.04 ) % $ 16.1   0.18   % Impact of fees related to repos refinancing $ 20.7 Accelerated amortization TARP discount and related deferred costs - $ 414.1 Net interest income (expense)/margin non-taxable equivalent basis $ 326.4 4.36 %   ($59.4 ) (0.77 ) %   (1) Borrowing expense for the third quarter, including the fees related to repos refinancing, was 5.34%, while borrowing expense including the impact of the accelerated TARP amortization in the second quarter was 50.31%.     Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table E - Consolidated Average Balances and Yield / Rate Analysis - YEAR-TO-DATE (Unaudited)   Nine months ended   Nine months ended       30-Sep-14 30-Sep-13 Variance Average   Income /   Yield / Average   Income /   Yield / Average Income / Yield / ($ amounts in millions; yields not on a taxable equivalent basis) balance Expense Rate balance Expense Rate balance Expense Rate Assets: Interest earning assets: Money market, trading and investment securities $ 7,635   $ 120.4 2.10 % $ 6,908   $ 126.3 2.44 % $ 727     ($5.9 ) (0.34 ) % Loans not covered under loss sharing agreements with the FDIC: Commercial 8,390 302.6 4.82 8,260 298.5 4.83 130 4.1 (0.01 ) Construction 187 9.7 6.93 330 10.7 4.34 (143 ) (1.0 ) 2.59 Mortgage 6,676 256.2 5.12 6,688 256.2 5.11 (12 ) - 0.01 Consumer 3,854 290.1 10.07 3,741 284.6 10.17 113 5.5 (0.10 ) Lease financing   545     30.3 7.40   541     33.1 8.16   4     (2.8 ) (0.76 ) Total loans not covered under loss sharing agreements with the FDIC 19,652 888.9 6.04 19,560 883.1 6.03 92 5.8 0.01 Loans covered under loss sharing agreements with the FDIC   2,823     232.3 11.00   3,299     214.0 8.67   (476 )   18.3   2.33   Total loans   22,475     1,121.2 6.66   22,859     1,097.1 6.41   (384 )   24.1   0.25   Total interest earning assets   30,110   $ 1,241.6 5.51 %   29,767   $ 1,223.4 5.49 %   343   $ 18.2   0.02   % Allowance for loan losses (624 ) (613 ) (11 ) Other non-interest earning assets 4,566 5,186 (620 ) Assets from discontinued operations   1,762     2,005     (243 ) Total average assets $ 35,814   $ 36,345     ($531 )   Liabilities and Stockholders' Equity: Interest bearing deposits: NOW and money market $ 4,837 $ 11.5 0.32 % $ 4,668 $ 12.0 0.34 % $ 169 ($0.5 ) (0.02 ) % Savings 6,715 10.9 0.22 6,559 11.7 0.24 156 (0.8 ) (0.02 ) Time deposits   7,605     57.2 1.01   8,013     72.5 1.21   (408 )   (15.3 ) (0.20 ) Total interest bearing deposits 19,157 79.6 0.56 19,240 96.2 0.67 (83 ) (16.6 ) (0.11 ) Borrowings [1]   3,690     109.0 3.94   4,459     137.1 4.10   (769 )   (28.1 ) (0.16 ) Total interest bearing liabilities   22,847     188.6 1.10   23,699     233.3 1.31   (852 )   (44.7 ) (0.21 ) Net interest spread 4.41 % 4.18 % 0.23   % Non-interest bearing deposits 5,499 5,339 160 Other liabilities 889 1,012 (123 ) Liabilities from discontinued operations 1,957 2,214 (257 ) Stockholders' equity   4,622     4,081     541   Total average liabilities and stockholders' equity $ 35,814   $ 36,345     ($531 )   Adjusted net interest income / margin non-taxable equivalent basis $ 1,053.0 4.67 % $ 990.1 4.44 % $ 62.9   0.23   % Impact of fees related to repos refinancing $ 20.7 Accelerated amortization of TARP discount and related deferred costs 414.1 Net interest income/margin non-taxable equivalent basis $ 618.2 2.75 %   (1) Borrowing expense including the fees related to repos refinancing and the impact of the accelerated TARP amortization was 19.65%.     Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table F - Mortgage Banking Activities and Other Service Fees (Unaudited)                 Mortgage Banking Activities Variance Quarters ended Q3 2014 vs. Q3 2014 vs. Nine months ended Variance (In thousands)   30-Sep-14   30-Jun-14   30-Sep-13   Q2 2014   Q3 2013   30-Sep-14   30-Sep-13   2014 vs. 2013 Mortgage servicing fees, net of fair value adjustments: Mortgage servicing fees $ 11,091 $ 10,558 $ 11,543 $ 533 $ (452 ) $ 32,397 $ 34,099 $ (1,702 ) Mortgage servicing rights fair value adjustments     (2,588 )     (7,740 )     3,879       5,152       (6,467 )     (18,424 )     (6,862 )     (11,562 ) Total mortgage servicing fees, net of fair value adjustments     8,503       2,818       15,422       5,685       (6,919 )     13,973       27,237       (13,264 ) Net gain on sale of loans, including valuation on loans held-for-sale     7,466       8,189       3,559       (723 )     3,907       22,831       16,968       5,863   Trading account (loss) profit: Unrealized gains (losses) on outstanding derivative positions 13 22 (865 ) (9 ) 878 (725 ) (265 ) (460 ) Realized (losses) gains on closed derivative positions     (1,580 )     (7,241 )     776       5,661       (2,356 )     (14,211 )     13,330       (27,541 ) Total trading account (loss) profit     (1,567 )     (7,219 )     (89 )     5,652       (1,478 )     (14,936 )     13,065       (28,001 ) Total mortgage banking activities   $ 14,402     $ 3,788     $ 18,892     $ 10,614     $ (4,490 )   $ 21,868     $ 57,270     $ (35,402 )                   Other Service Fees Variance Quarters ended Q3 2014 vs. Q3 2014 vs. Nine months ended Variance (In thousands)   30-Sep-14   30-Jun-14   30-Sep-13   Q2 2014   Q3 2013   30-Sep-14   30-Sep-13   2014 vs. 2013 Other service fees: Debit card fees $ 10,673 $ 11,000 $ 10,667 $ (327 ) $ 6 $ 32,217 $ 31,127 $ 1,090 Insurance fees 12,322 12,406 12,409 (84 ) (87 ) 36,447 35,566 881 Credit card fees 17,078 16,985 16,734 93 344 50,146 48,553 1,593 Sale and administration of investment products 6,605 7,456 8,981 (851 ) (2,376 ) 20,518 27,941 (7,423 ) Trust fees 4,711 4,566 4,148 145 563 13,740 12,760 980 Other fees     3,450     4,055     4,102     (605 )     (652 )     11,057     13,317     (2,260 ) Total other service fees   $ 54,839   $ 56,468   $ 57,041   $ (1,629 )   $ (2,202 )   $ 164,125   $ 169,264   $ (5,139 )             Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table G - Loans and Deposits (Unaudited)   Loans - Ending Balances Variance (In thousands)   30-Sep-14   30-Jun-14   30-Sep-13  

Q3 2014 vs.Q2 2014

 

Q3 2014 vs.Q3 2013

Loans not covered under FDIC loss sharing agreements: Commercial $ 8,058,714 $ 8,155,547 $ 9,845,477 $ (96,833 ) $ (1,786,763 ) Construction 211,850 179,059 293,220 32,791 (81,370 ) Legacy [1] 91,015 162,941 235,645 (71,926 ) (144,630 ) Lease financing 550,514 546,868 539,290 3,646 11,224 Mortgage 6,555,337 6,664,448 6,613,133 (109,111 ) (57,796 ) Consumer     3,891,786     3,926,361     3,900,418     (34,575 )     (8,632 ) Total non-covered loans held-in-portfolio $ 19,359,216 $ 19,635,224 $ 21,427,183 $ (276,008 ) $ (2,067,967 ) Loans covered under FDIC loss sharing agreements     2,654,263     2,736,102     3,076,009     (81,839 )     (421,746 ) Total loans held-in-portfolio   $ 22,013,479   $ 22,371,326   $ 24,503,192   $ (357,847 )   $ (2,489,713 ) Loans held-for-sale: Commercial $ 33,658 $ 2,895 $ - $ 30,763 $ 33,658 Construction - 949 - (949 ) - Legacy [1] 31,823 - 1,680 31,823 30,143 Mortgage 106,832 93,166 122,852 13,666 (16,020 ) Consumer     5,695     -     -     5,695       5,695   Total loans held-for-sale   $ 178,008   $ 97,010   $ 124,532   $ 80,998     $ 53,476   Total loans   $ 22,191,487   $ 22,468,336   $ 24,627,724   $ (276,849 )   $ (2,436,237 ) [1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment. Note: Loans from discontinued operations as of September 30,2014 and June 30, 2014 are presented as part of “Assets from discontinued operations” in the Consolidated Statement of Financial Condition.   Deposits - Ending Balances Variance (In thousands)   30-Sep-14   30-Jun-14   30-Sep-13  

Q3 2014 vs.Q2 2014

 

Q3 2014 vs.Q3 2013

Demand deposits [1] $ 6,326,220 $ 6,412,632 $ 6,410,458 $ (86,412 ) $ (84,238 ) Savings, NOW and money market deposits (non-brokered) 10,251,602 10,276,715 11,335,441 (25,113 ) (1,083,839 ) Savings, NOW and money market deposits (brokered) 386,573 543,032 552,053 (156,459 ) (165,480 ) Time deposits (non-brokered) 5,636,443 5,790,324 6,181,676 (153,881 ) (545,233 ) Time deposits (brokered CDs)     1,865,267     1,878,449     1,915,426     (13,182 )     (50,159 ) Total deposits   $ 24,466,105   $ 24,901,152   $ 26,395,054   $ (435,047 )   $ (1,928,949 ) [1] Includes interest and non-interest demand bearing deposits. Note: Deposits from discontinued operations as of September 30, 2014 and June 30, 2014 are presented as part of “Liabilities from discontinued operations” in the Consolidated Statement of Financial Condition.   Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table H - Non-Performing Assets (Unaudited)                 Variance (Dollars in thousands)   30-Sep-14  

As a % ofloans HIP bycategory

    30-Jun-14  

As a % ofloans HIP bycategory

      30-Sep-13  

As a % ofloans HIP bycategory

   

Q3 2014 vs.Q2 2014

 

Q3 2014 vs.Q3 2013

Non-accrual loans:   Commercial $ 252,331 3.1 % $ 278,133 3.4 % $ 316,040 3.2 % $ (25,802 ) $ (63,709 ) Construction 19,148 9.0 21,456 12.0 28,782 9.8 (2,308 ) (9,634 ) Legacy [1] 5,648 6.2 8,323 5.1 24,206 10.3 (2,675 ) (18,558 ) Lease financing 3,168 0.6 2,873 0.5 3,716 0.7 295 (548 ) Mortgage 295,125 4.5 286,320 4.3 203,208 3.1 8,805 91,917 Consumer     46,525   1.2       42,630   1.1         41,621   1.1       3,895       4,904  

Total non-performing loans held-in- portfolio, excluding covered loans [2]

621,945 3.2 % 639,735 3.3 % 617,573 2.9 % (17,790 ) 4,372 Non-performing loans held-for-sale [3] 19,728 4,426 2,099 15,302 17,629

Other real estate owned (“OREO”), excluding covered OREO

    135,256           139,420             135,502           (4,164 )     (246 )

Total non-performing assets, excluding covered assets

776,929 783,581 755,174 (6,652 ) 21,755 Covered loans and OREO     166,533           171,955             190,554           (5,422 )     (24,021 ) Total non-performing assets   $ 943,462         $ 955,536           $ 945,728         $ (12,074 )   $ (2,266 ) Accruing loans past due 90 days or more [4]   $ 426,459         $ 420,251           $ 414,189         $ 6,208     $ 12,270   Ratios excluding covered loans:

Non-performing loans held-in-portfolio to loans held-in-portfolio

3.21 % 3.26 % 2.88 %

Allowance for loan losses to loans held-in-portfolio

2.69 2.68 2.46

Allowance for loan losses to non-performing loans, excluding loans held-for-sale

    83.88           82.26             85.19               Ratios including covered loans: Non-performing assets to total assets 2.77 % 2.61 % 2.62 %

Non-performing loans held-in-portfolio to loans held-in-portfolio

2.89 2.93 2.64

Allowance for loan losses to loans held-in-portfolio

2.78 2.79 2.62

Allowance for loan losses to non-performing loans, excluding loans held-for-sale

    95.96           95.28             99.53               [1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment.   [2] Total non-performing loans held-in-portfolio, excluding covered loans, excludes $48 thousand and $9.5 million, respectively, in discontinued operations as of September 30, 2014 and June 30, 2014.   [3] Non-performing loans held-for-sale as of September 30, 2014 consisted of $14.7 million in mortgage loans, $427 thousand in commercial loans and $4.6 million in consumer loans and $10 thousand in legacy loans (June 30, 2014 - $582 thousand in mortgage loans, $3 million in commercial loans and $1 million in construction loans; September 30, 2013 - $1.7 million in legacy loans and $0.4 million in mortgage loans).   [4] It is the Corporation’s policy to report delinquent residential mortgage loans insured by FHA or guaranteed by the VA as accruing loans past due 90 days or more as opposed to nonperforming since the principal repayment is insured. These balances include $125 million of residential mortgage loans insured by FHA or guaranteed by the VA that are no longer accruing interest as of September 30, 2014 (June 30, 2014 - $124 million; September 30, 2013 - $113 million).     Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table I - Activity in Non-Performing Loans (Unaudited)             Commercial loans held-in-portfolio: Quarter ended Quarter ended 30-Sep-14 30-Jun-14 (In thousands) BPPR BPNA Popular, Inc. BPPR BPNA Popular, Inc. Beginning balance NPLs $

253,552

$ 24,581 $

278,133

$ 245,931 $ 60,998 $ 306,929 Plus: New non-performing loans 23,410 4,541 27,951 30,068 7,726 37,794 Advances on existing non-performing loans - - - - 951 951 Less: Non-performing loans transferred to OREO (2,706 ) - (2,706 ) (4,103 ) - (4,103 ) Non-performing loans charged-off (10,085 ) (3,103 ) (13,188 ) (14,377 ) (5,470 ) (19,847 ) Loans returned to accrual status / loan collections

(19,746

) (2,649 )

(22,395

) (3,967 ) (15,475 ) (19,442 ) Loans transferred to held-for-sale - (22,967 ) (22,967 ) - (16,130 ) (16,130 )

Non-performing loans transferred from (to) discontinued operations

  -     7,503     7,503     -     (8,019 )   (8,019 ) Ending balance NPLs $ 244,425   $ 7,906   $ 252,331   $ 253,552   $ 24,581   $ 278,133     Construction loans held-in-portfolio: Quarter ended Quarter ended 30-Sep-14 30-Jun-14 (In thousands) BPPR BPNA Popular, Inc. BPPR BPNA Popular, Inc. Beginning balance NPLs $ 21,456 $ - $ 21,456 $ 22,464 $ - $ 22,464 Plus: New non-performing loans - - - 952 - 952 Less: Non-performing loans charged-off (985 ) - (985 ) (42 ) - (42 ) Loans returned to accrual status / loan collections   (1,323 )   -     (1,323 )   (1,918 )   -     (1,918 ) Ending balance NPLs $ 19,148   $ -   $ 19,148   $ 21,456   $ -   $ 21,456                 Mortgage loans held-in-portfolio: Quarter ended Quarter ended 30-Sep-14   30-Jun-14 (In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc. Beginning balance NPLs $

262,356

$

23,964

$

286,320

$ 229,801 $ 22,220 $ 252,021 Plus: New non-performing loans 95,207 2,802 98,009 105,113 4,677 109,790 Less: Non-performing loans transferred to OREO (3,062 ) (870 ) (3,932 ) (2,845 ) (661 ) (3,506 ) Non-performing loans charged-off (11,309 ) (395 ) (11,704 ) (8,266 ) (649 ) (8,915 ) Loans returned to accrual status / loan collections

(53,003

)

(686

)

(53,689

) (61,447 ) (1,623 ) (63,070 ) Loans transferred to held-for-sale - (13,123 ) (13,123 ) - - - Reclassification to consumer loans     (6,756 )     -       (6,756 )     -       -       -   Ending balance NPLs   $ 283,433     $ 11,692     $ 295,125     $ 262,356     $ 23,964     $ 286,320     Legacy loans held-in-portfolio: Quarter ended Quarter ended 30-Sep-14   30-Jun-14 (In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc. Beginning balance NPLs $ - $ 8,323 $ 8,323 $ - $ 11,608 $ 11,608 Plus: New non-performing loans - 1,852 1,852 - 2,201 2,201 Advances on existing non-performing loans - 149 149 - 49 49 Less: Non-performing loans transferred to OREO - (189 ) (189 ) - - - Non-performing loans charged-off - (2,109 ) (2,109 ) - (816 ) (816 ) Loans returned to accrual status / loan collections - (975 ) (975 ) - (2,227 ) (2,227 ) Loans transferred to held-for-sale - (2,529 ) (2,529 ) - (1,272 ) (1,272 )

Non-performing loans transferred from (to) discontinued operations

    -       1,126       1,126       -       (1,220 )     (1,220 ) Ending balance NPLs   $ -     $ 5,648     $ 5,648     $ -     $ 8,323     $ 8,323               Total non-performing loans held-in-portfolio (excluding consumer loans): Quarter ended Quarter ended 30-Sep-14 30-Jun-14 (In thousands)   BPPR   BPNA   Popular, Inc.   BPPR   BPNA   Popular, Inc. Beginning balance NPLs $

537,364

$

56,868

$

594,232

$ 498,196 $ 94,826 $ 593,022 Plus: New non-performing loans 118,617 9,195 127,812 136,133 14,604 150,737 Advances on existing non-performing loans - 149 149 - 1,000 1,000 Less: Non-performing loans transferred to OREO (5,768 ) (1,059 ) (6,827 ) (6,948 ) (661 ) (7,609 ) Non-performing loans charged-off (22,379 ) (5,607 ) (27,986 ) (22,685 ) (6,935 ) (29,620 ) Loans returned to accrual status / loan collections

(74,072

)

(4,310

)

(78,382

) (67,332 ) (19,325 ) (86,657 ) Loans transferred to held-for-sale - (38,619 ) (38,619 ) - (17,402 ) (17,402 )

Non-performing loans transferred from (to) discontinued operations

- 8,629 8,629 - (9,239 ) (9,239 ) Reclassification to consumer loans     (6,756 )     -       (6,756 )     -       -       -   Ending balance NPLs   $ 547,006     $ 25,246     $ 572,252     $ 537,364     $ 56,868     $ 594,232       Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table J - Allowance for Credit Losses, Net Charge-offs and Related Ratios (Unaudited)           Quarter ended Quarter ended Quarter ended     30-Sep-14   30-Jun-14   30-Sep-13   (Dollars in thousands)  

Non-coveredloans

 

Coveredloans

  Total  

Non-coveredloans

 

Coveredloans

  Total  

Non-coveredloans

 

Coveredloans

  Total   Balance at beginning of period $ 526,246 $ 98,665 $ 624,911 $ 542,575 $ 97,773 $ 640,348 $ 528,762 $ 106,457 $ 635,219 Provision for loan losses - Continuing operations 68,166 12,463 80,629 50,074 11,604 61,678 48,715 17,433 66,148 Provision for loan losses - Discontinued operations     -       -       -       -       -       -       6,515       -     6,515           594,412       111,128       705,540       592,649       109,377       702,026       583,992       123,890     707,882     Net loans charged-off (recovered): BPPR Commercial 1,011 16,590 17,601 9,309 5,438 14,747 16,145 2,533 18,678 Construction (1,237 ) 4,066 2,829 (615 ) 3,700 3,085 (4,906 ) 2,893 (2,013 ) Lease financing 1,410 (1 ) 1,409 1,144 1 1,145 470 - 470 Mortgage 13,330 1,809 15,139 9,926 2,251 12,177 11,393 1,579 12,972 Consumer     24,168       (1,024 )     23,144       23,571       (678 )     22,893       21,576       57     21,633   Total BPPR     38,682       21,440       60,122       43,335       10,712       54,047       44,678       7,062     51,740     BPNA Commercial (893 ) - (893 ) 910 - 910 (484 ) - (484 ) Construction (59 ) - (59 ) - - - - - - Legacy [1] 221 - 221 (1,205 ) - (1,205 ) 2,319 - 2,319 Mortgage 26 - 26 393 - 393 1,335 - 1,335 Consumer 2,492 - 2,492 2,768 - 2,768 4,013 - 4,013 Discontinued operations     -       -       -       -       -       -       6,031       -     6,031     Total BPNA     1,787       -       1,787       2,866       -       2,866       13,214       -     13,214     Total loans charged-off (recovered) - Popular, Inc.     40,469       21,440       61,909       46,201       10,712       56,913       57,892       7,062     64,954     Net write-downs     (32,256 )     -       (32,256 )     -       -       -       -       -     -     Net write-downs related to loans transferred to discontinued operations     -       -       -       (20,202 )     -       (20,202 )     -       -     -     Balance at end of period   $ 521,687     $ 89,688     $ 611,375     $ 526,246     $ 98,665     $ 624,911     $ 526,100     $ 116,828   $ 642,928       POPULAR, INC. Annualized net charge-offs to average loans held-in-portfolio 0.83 % 1.12 % 0.94 % 1.01 % 1.08 % 1.06 % Provision for loan losses to net charge-offs [2] 1.39 x 1.11 x 1.08 x 1.08 x 0.95 x 1.12 x   BPPR Annualized net charge-offs to average loans held-in-portfolio 0.98 % 1.30 % 1.09 % 1.16 % 1.15 % 1.11 % Provision for loan losses to net charge-offs [2]

1.60

x

1.24

x 1.73 x 1.60 x 1.13 x 1.31 x   BPNA Annualized net charge-offs (recoveries) to average loans held-in-portfolio 0.19 % 0.30 % 0.91 % Provision for loan losses to net charge-offs           N.M.           N.M.             0.36   x [1] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA segment.  

[2] Excluding provision for loan losses and net write-down related to the BPNA legacy and classified asset sales during the quarter ended September 30, 2014.

  N.M. - Not meaningful.   Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table K - Allowance for Loan Losses - Breakdown of General and Specific Reserves - CONSOLIDATED (Unaudited)                                                                 30-Sep-14 (Dollars in thousands)       Commercial     Construction     Legacy [3]     Mortgage    

Leasefinancing

    Consumer     Total [2] Specific ALLL $ 64,750 $ 133 $ - $ 38,207 $ 698 $ 28,166 $ 131,954 Impaired loans [1] $ 373,501 $ 18,894 $ 2,311 $ 431,806 $ 2,709 $ 116,830 $ 946,051 Specific ALLL to impaired loans   [1]     17.34 %     0.70 %     - %     8.85 %     25.77 %     24.11 %     13.95 % General ALLL $ 151,681 $ 6,375 $ 4,001 $ 83,314 $ 6,673 $ 137,689 $ 389,733 Loans held-in-portfolio, excluding impaired loans [1] $ 7,685,213 $ 192,956 $ 88,704 $ 6,123,531 $ 547,805 $ 3,774,956 $ 18,413,165 General ALLL to loans held-in-portfolio, excluding impaired loans   [1]     1.97 %     3.30 %     4.51 %     1.36 %     1.22 %     3.65 %     2.12 % Total ALLL $ 216,431 $ 6,508 $ 4,001 $ 121,521 $ 7,371 $ 165,855 $ 521,687 Total non-covered loans held-in-portfolio [1] $ 8,058,714 $ 211,850 $ 91,015 $ 6,555,337 $ 550,514 $ 3,891,786 $ 19,359,216 ALLL to loans held-in-portfolio   [1]     2.69 %     3.07 %     4.40 %     1.85 %    

1.34

%     4.26 %     2.69 % [1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction.   [2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of September 30, 2014 the general allowance on the covered loans amounted to $89.7 million, while the specific reserve amounted to $4 thousand.   [3] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA reportable segment.                                                 30-Jun-14 (Dollars in thousands)       Commercial     Construction     Legacy [3]     Mortgage    

Leasefinancing

    Consumer     Total [2] Specific ALLL $ 36,597 $ 883 $ - $ 53,815 $ 688 $ 29,043 $ 121,026 Impaired loans [1] $ 317,746 $ 21,094 $ 2,536 $ 466,243 $ 2,653 $ 122,106 $ 932,378 Specific ALLL to impaired loans   [1]     11.52 %     4.19 %     - %     11.54 %     25.93 %     23.79 %     12.98 % General ALLL $ 165,912 $ 4,459 $ 9,343 $ 84,113 $ 5,271 $ 136,122 $ 405,220 Loans held-in-portfolio, excluding impaired loans [1] $ 7,837,801 $ 157,965 $ 160,405 $ 6,198,205 $ 544,215 $ 3,804,255 $ 18,702,846 General ALLL to loans held-in-portfolio, excluding impaired loans   [1]     2.12 %     2.82 %     5.82 %     1.36 %     0.97 %     3.58 %     2.17 % Total ALLL $ 202,509 $ 5,342 $ 9,343 $ 137,928 $ 5,959 $ 165,165 $ 526,246 Total non-covered loans held-in-portfolio [1] $ 8,155,547 $ 179,059 $ 162,941 $ 6,664,448 $ 546,868 $ 3,926,361 $ 19,635,224 ALLL to loans held-in-portfolio   [1]     2.48 %     2.98 %     5.73 %     2.07 %     1.09 %     4.21 %     2.68 % [1] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction.   [2] Excludes covered loans acquired on the Westernbank FDIC-assisted transaction. As of June 30, 2014 the general allowance on the covered loans amounted to $98.7 million, while the specific reserve amounted to $8 thousand.   [3] The legacy portfolio is comprised of commercial loans, construction loans and lease financings related to certain lending products exited by the Corporation as part of restructuring efforts carried out in prior years at the BPNA reportable segment.                               Variance (Dollars in thousands)   Commercial   Construction   Legacy   Mortgage   Lease financing   Consumer   Total Specific ALLL   $ 28,153   $ (750 )   $ -   $ (15,608 )   $ 10   $ (877 )   $ 10,928 Impaired loans   $ 55,755     $ (2,200 )   $ (225 )   $ (34,437 )   $ 56   $ (5,276 )   $ 13,673   General ALLL $ (14,231 ) $ 1,916 $ (5,342 ) $ (799 ) $ 1,402 $ 1,567 $ (15,487 ) Loans held-in-portfolio, excluding impaired loans   $ (152,588 )   $ 34,991     $ (71,701 )   $ (74,674 )   $ 3,590   $ (29,299 )   $ (289,681 ) Total ALLL $ 13,922 $ 1,166 $ (5,342 ) $ (16,407 ) $ 1,412 $ 690 $ (4,559 ) Total non-covered loans held-in-portfolio   $ (96,833 )   $ 32,791     $ (71,926 )   $ (109,111 )   $ 3,646   $ (34,575 )   $ (276,008 )   Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table L - Allowance for Loan Losses - Breakdown of General and Specific Reserves - PUERTO RICO OPERATIONS (Unaudited)               30-Sep-14 Puerto Rico (In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total Allowance for credit losses: Specific ALLL non-covered loans $ 64,750 $ 133 $ 37,491 $ 698 $ 27,723 $ 130,795   General ALLL non-covered loans     140,906     5,534     81,728     6,673     123,816     358,657 ALLL - non-covered loans     205,656     5,667     119,219     7,371     151,539     489,452 Specific ALLL covered loans 4 - - - - 4   General ALLL covered loans     36,411     7,193     42,524     -     3,556     89,684 ALLL - covered loans     36,415     7,193     42,524     -     3,556     89,688 Total ALLL   $ 242,071   $ 12,860   $ 161,743   $ 7,371   $ 155,095   $ 579,140 Loans held-in-portfolio: Impaired non-covered loans $ 373,049 $ 18,894 $ 424,336 $ 2,709 $ 114,850 $ 933,838   Non-covered loans held-in-portfolio, excluding impaired loans     5,896,673     129,889     5,028,786     547,805     3,286,492     14,889,645 Non-covered loans held-in-portfolio     6,269,722     148,783     5,453,122     550,514     3,401,342     15,823,483 Impaired covered loans 2,765 2,419 - - - 5,184   Covered loans held-in-portfolio, excluding impaired loans     1,693,886     72,049     846,472     -     36,672     2,649,079 Covered loans held-in-portfolio     1,696,651     74,468     846,472     -     36,672     2,654,263 Total loans held-in-portfolio   $ 7,966,373   $ 223,251   $ 6,299,594   $ 550,514   $ 3,438,014   $ 18,477,746             30-Jun-14 Puerto Rico (In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total Allowance for credit losses: Specific ALLL non-covered loans $ 36,597 $ 883 $ 39,341 $ 688 $ 28,458 $ 105,967 General ALLL non-covered loans     147,638       4,308       81,058       5,271     122,024       360,299   ALLL - non-covered loans     184,235       5,191       120,399       5,959     150,482       466,266   Specific ALLL covered loans 8 - - - - 8 General ALLL covered loans     46,685       8,996       38,941       -     4,035       98,657   ALLL - covered loans     46,693       8,996       38,941       -     4,035       98,665   Total ALLL   $ 230,928     $ 14,187     $ 159,340     $ 5,959   $ 154,517     $ 564,931   Loans held-in-portfolio: Impaired non-covered loans $ 307,762 $ 21,094 $ 414,636 $ 2,653 $ 119,604 $ 865,749 Non-covered loans held-in-portfolio, excluding impaired loans     5,991,218       114,589       5,043,936       544,215     3,296,245       14,990,203   Non-covered loans held-in-portfolio     6,298,980       135,683       5,458,572       546,868     3,415,849       15,855,952   Impaired covered loans 2,823 2,419 - - - 5,242 Covered loans held-in-portfolio, excluding impaired loans     1,743,144       80,344       867,075       -     40,297       2,730,860   Covered loans held-in-portfolio     1,745,967       82,763       867,075       -     40,297       2,736,102   Total loans held-in-portfolio   $ 8,044,947     $ 218,446     $ 6,325,647     $ 546,868   $ 3,456,146     $ 18,592,054                               Variance (In thousands)   Commercial   Construction   Mortgage   Lease financing   Consumer   Total Allowance for credit losses: Specific ALLL non-covered loans $ 28,153 $ (750 ) $ (1,850 ) $ 10 $ (735 ) $ 24,828 General ALLL non-covered loans     (6,732 )     1,226       670       1,402     1,792       (1,642 ) ALLL - non-covered loans     21,421       476       (1,180 )     1,412     1,057       23,186   Specific ALLL covered loans (4 ) - - - - (4 ) General ALLL covered loans     (10,274 )     (1,803 )     3,583       -     (479 )     (8,973 ) ALLL - covered loans     (10,278 )     (1,803 )     3,583       -     (479 )     (8,977 ) Total ALLL   $ 11,143     $ (1,327 )   $ 2,403     $ 1,412   $ 578     $ 14,209   Loans held-in-portfolio: Impaired non-covered loans $ 65,287 $ (2,200 ) $ 9,700 $ 56 $ (4,754 ) $ 68,089 Non-covered loans held-in-portfolio, excluding impaired loans     (94,545 )     15,300       (15,150 )     3,590     (9,753 )     (100,558 ) Non-covered loans held-in-portfolio     (29,258 )     13,100       (5,450 )     3,646     (14,507 )     (32,469 ) Impaired covered loans (58 ) - - - - (58 ) Covered loans held-in-portfolio, excluding impaired loans     (49,258 )     (8,295 )     (20,603 )     -     (3,625 )     (81,781 ) Covered loans held-in-portfolio     (49,316 )     (8,295 )     (20,603 )     -     (3,625 )     (81,839 ) Total loans held-in-portfolio   $ (78,574 )   $ 4,805     $ (26,053 )   $ 3,646   $ (18,132 )   $ (114,308 )   Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table M - Allowance for Loan Losses - Breakdown of General and Specific Reserves - U.S. MAINLAND OPERATIONS (Unaudited)             30-Sep-14 U.S. Mainland (In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total Allowance for credit losses: Specific ALLL $ - $ - $ - $ 716 $ 443 $ 1,159 General ALLL     10,775       841     4,001       1,586       13,873       31,076   Total ALLL   $ 10,775     $ 841   $ 4,001     $ 2,302     $ 14,316     $ 32,235   Loans held-in-portfolio: Impaired loans $ 452 $ - $ 2,311 $ 7,470 $ 1,980 $ 12,213 Loans held-in-portfolio, excluding impaired loans     1,788,540       63,067     88,704       1,094,745       488,464       3,523,520   Total loans held-in-portfolio   $ 1,788,992     $ 63,067   $ 91,015     $ 1,102,215     $ 490,444     $ 3,535,733       30-Jun-14 U.S. Mainland (In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total Allowance for credit losses: Specific ALLL $ - $ - $ - $ 14,474 $ 585 $ 15,059 General ALLL     18,274       151     9,343       3,055       14,098       44,921   Total ALLL   $ 18,274     $ 151   $ 9,343     $ 17,529     $ 14,683     $ 59,980   Loans held-in-portfolio: Impaired loans $ 9,984 $ - $ 2,536 $ 51,607 $ 2,502 $ 66,629 Loans held-in-portfolio, excluding impaired loans     1,846,583       43,376     160,405       1,154,269       508,010       3,712,643   Total loans held-in-portfolio   $ 1,856,567     $ 43,376   $ 162,941     $ 1,205,876     $ 510,512     $ 3,779,272                               Variance (In thousands)   Commercial   Construction   Legacy   Mortgage   Consumer   Total Allowance for credit losses: Specific ALLL $ - $ - $ - $ (13,758 ) $ (142 ) $ (13,900 ) General ALLL     (7,499 )     690     (5,342 )     (1,469 )     (225 )     (13,845 ) Total ALLL   $ (7,499 )   $ 690   $ (5,342 )   $ (15,227 )   $ (367 )   $ (27,745 ) Loans held-in-portfolio: Impaired loans $ (9,532 ) $ - $ (225 ) $ (44,137 ) $ (522 ) $ (54,416 ) Loans held-in-portfolio, excluding impaired loans     (58,043 )     19,691     (71,701 )     (59,524 )     (19,546 )     (189,123 ) Total loans held-in-portfolio   $ (67,575 )   $ 19,691   $ (71,926 )   $ (103,661 )   $ (20,068 )   $ (243,539 )     Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table N - Reconciliation to GAAP Financial Measures (Unaudited)       (In thousands, except share or per share information) 30-Sep-14   30-Jun-14   30-Sep-13   Total stockholders’ equity $ 4,298,392 $ 4,260,441 $ 4,393,885 Less: Preferred stock (50,160 ) (50,160 ) (50,160 ) Less: Goodwill (461,246 ) (461,246 ) (647,757 ) Less: Other intangibles   (37,777 )     (40,122 )     (46,892 )   Total tangible common equity $ 3,749,209     $ 3,708,913     $ 3,649,076     Total assets $ 34,099,095 $ 36,587,902 $ 36,052,116 Less: Goodwill (461,246 ) (461,246 ) (647,757 ) Less: Other intangibles   (37,777 )     (40,122 )     (46,892 )   Total tangible assets $ 33,600,072     $ 36,086,534     $ 35,357,467     Tangible common equity to tangible assets 11.16 % 10.28 % 10.32 % Common shares outstanding at end of period 103,448,206 103,472,979 103,327,146 Tangible book value per common share $ 36.24     $ 35.84     $ 35.32           (In thousands) 30-Sep-14   30-Jun-14   30-Sep-13   Common stockholders’ equity $ 4,248,232 $ 4,210,281 $ 4,343,725 Less: Unrealized losses (gains) on available-for-sale securities, net of tax[1] 16,787 (4,071 ) 5,514 Less: Disallowed deferred tax assets[2] (618,141 ) (636,081 ) (643,716 ) Less: Disallowed goodwill and other intangible assets, net of deferred tax liability (444,759 ) (447,182 ) (646,464 ) Less: Aggregate adjusted carrying value of all non-financial equity investments (1,462 ) (1,381 ) (1,398 ) Add: Adjustment of pension and postretirement benefit plans and unrealized gains (losses) on cash flow hedges, net of tax[3]   102,279       103,263       216,274     Total Tier 1 common equity $ 3,302,936     $ 3,224,829     $ 3,273,935     Tier 1 common equity to risk-weighted assets   14.79   %   13.51   %   14.20   % [1] In accordance with regulatory risk-based capital guidelines, Tier 1 capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values. In arriving at Tier 1 capital, institutions are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax.  

[2] Approximately $147 million of the Corporation’s $758 million of net deferred tax assets included as “Other assets” in the consolidated statement of financial condition at September 30, 2014 (June 30, 2014 - $159 million and $789 million, respectively; September 30, 2013 - $160 million and $844 million, respectively), were included without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $618 million of such assets at September 30, 2014 (June 30, 2014 - $636 million; September 30, 2013 - $644 million) exceeded the limitation imposed by these guidelines and, as “disallowed deferred tax assets”, were deducted in arriving at Tier 1 capital. The remaining $(7) million of the Corporation’s other net deferred tax assets at September 30, 2014 (June 30, 2014 - $(6) million; September 30, 2013 - $40 million) represented primarily the following items: (a) the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines; (b) the deferred tax asset corresponding to the pension liability adjustment recorded as part of accumulated other comprehensive income; and (c) the deferred tax liabilities associated with goodwill and other intangibles.

  [3] The Federal Reserve Bank has granted interim capital relief for the impact of pension liability adjustment.     Popular, Inc. Financial Supplement to Third Quarter 2014 Earnings Release Table O - Financial Information - Westernbank Covered Loans (Unaudited)           Revenues Quarters ended (In thousands)   30-Sep-14   30-Jun-14 Variance Interest income on covered loans   $ 68,251     $ 82,975     $ (14,724 ) FDIC loss share expense: Amortization of indemnification asset (42,524 ) (72,095 ) 29,571 Reversal of accelerated amortization in prior periods 15,046 - 15,046 80% mirror accounting on credit impairment losses [1] 9,863 10,372 (509 ) 80% mirror accounting on reimbursable expenses 15,545 11,085 4,460

80% mirror accounting on recoveries on covered assets, including rental income on OREOs, subject to reimbursement to the FDIC

(2,633 ) (3,557 ) 924 Change in true-up payment obligation 1,078 (1,206 ) 2,284 Other     (1,239 )     140       (1,379 ) Total FDIC loss share expense     (4,864 )     (55,261 )     50,397   Total revenues     63,387       27,714       35,673   Provision for loan losses     12,463       11,604       859   Total revenues less provision for loan losses   $ 50,924     $ 16,110     $ 34,814   [1]Reductions in expected cash flows for ASC 310-30 loans, which may impact the provision for loan losses, may consider reductions in both principal and interest cash flow expectations. The amount covered under the FDIC loss sharing agreements for interest not collected from borrowers is limited under the agreements (approximately 90 days); accordingly, these amounts are not subject fully to the 80% mirror accounting.     Non-personnel operating expenses Quarters ended (In thousands)   30-Sep-14   30-Jun-14   Variance Professional fees $ 5,164 $ 4,726 $ 438 OREO expenses 11,661 5,249 6,412 Other operating expenses     3,160       2,868       292   Total operating expenses $ 19,985   $ 12,843   $ 7,142   Expense reimbursements from the FDIC may be recorded with a time lag, since these are claimed upon the event of loss or charge-off of the loans which may occur in a subsequent period.     Quarterly average assets Quarters ended (In millions)   30-Sep-14   30-Jun-14   Variance Covered loans $ 2,727 $ 2,811 $ (84 ) FDIC loss share asset     687       792       (105 ) Activity in the carrying amount and accretable yield of covered loans accounted for under ASC 310-30       Quarters ended     30-Sep-14   30-Jun-14 (In thousands)   Accretable yield   Carrying amount of loans   Accretable yield   Carrying amount of loans Beginning balance $ 1,280,758   $ 2,610,664 $ 1,218,212 $ 2,733,122 Accretion (66,017 ) 66,017 (79,863 ) 79,863 Changes in expected cash flows 97,780 - 142,409 - Collections / charge-offs     -       (148,248 )     -       (202,321 ) Ending balance 1,312,521 2,528,433 1,280,758 2,610,664 Allowance for loan losses - ASC 310-30 covered loans     -       (85,640 )     -       (90,892 ) Ending balance, net of allowance for loan losses   $ 1,312,521     $ 2,442,793     $ 1,280,758     $ 2,519,772       Activity in the carrying amount of the FDIC indemnity asset   Quarters ended (In thousands)       30-Sep-14       30-Jun-14 Balance at beginning of period $ 751,553 $ 833,721 Amortization (42,524 ) (72,095 ) Reversal of accelerated amortization in prior periods 15,046 - Credit impairment losses to be covered under loss sharing agreements 9,863 10,372 Reimbursable expenses to be covered under loss sharing agreements 15,545 11,085 Net payments to (from) FDIC under loss sharing agreements (73,106 ) (31,530 ) Other adjustments attributable to FDIC loss sharing agreements         4,729           -   Balance at end of period       $ 681,106         $ 751,553       Activity in the remaining FDIC loss share asset amortization   Quarters ended (In thousands)       30-Sep-14       30-Jun-14 Balance at beginning of period $ 105,939 $ 71,634 Amortization (42,524 ) (72,095 ) Impact of lower projected losses         3,147           106,400   Balance at end of period       $ 66,562         $ 105,939     POPULAR, INC. Financial Supplement to Third Quarter 2014 Earnings Release Table P - Financial Information from Discontinued Operations (Unaudited)           Assets and Liabilities from Discontinued Operations   (In thousands) 30-Sep-14   30-Jun-14   Variance   Cash $ 9,500 $ 18,923 $ (9,423 ) Loans held-for-sale 1,099,673 1,783,998 (684,325 ) Premises and equipment, net 8,596 17,553 (8,957 ) Other assets                 11,284     7,908       3,376   Total assets               $ 1,129,053   $ 1,828,382     $ (699,329 )   Deposits $ 1,089,046 $ 2,058,309 $ (969,263 ) Short-term borrowings - 2,998 (2,998 ) Other liabilities                 17,716     18,435       (719 ) Total liabilities               $ 1,106,762   $ 2,079,742     $ (972,980 ) Net assets (liabilities)               $ 22,291   $ (251,360 )   $ 273,651       Components of Net Income (Loss) from Discontinued Operations         Quarters ended     Nine months ended (In thousands)     30-Sep-14     30-Jun-14     30-Sep-13     30-Sep-14     30-Sep-13   Net interest income $ 16,022 $ 19,092 $ 23,195 $ 56,911 $ 66,172 Provision (reversal) for loan losses - - 6,515 (6,764 ) (1,345 ) Gain on sale of regions 25,775 - - 25,775 - Other non-interest income 6,567 9,388 5,250 26,488 13,642 Personnel costs 11,941 12,117 8,487 32,910 25,215 Net occupancy expenses (1,305 ) 2,845 3,325 5,871 9,355 Professional fees 4,916 5,903 2,802 13,612 8,511 Goodwill impairment charge - 186,511 - 186,511 - Other operating expenses     3,054       2,833       3,694     9,100       9,422   Net income (loss) from discontinued operations   $ 29,758     $ (181,729 )   $ 3,622   $ (132,066 )   $ 28,656     POPULAR, INC. Financial Supplement to Third Quarter 2014 Earnings Release Table Q - Restructuring Charges   (Unaudited)   Restructuring Charges Quarters ended (In thousands)   30-Sep-14     30-Jun-14     Variance   Personnel costs $ 6,194 $ 3,630 $ 2,564 Net occupancy expenses 152 271 (119 ) Equipment expenses 141 190 (49 ) Professional fees 1,431 448 983 Communications 14 - 14 Other operating expenses   358     35     323   Total restructuring costs $ 8,290   $ 4,574   $ 3,716  

Popular, Inc.Investor Relations:Brett Scheiner, 212-417-6721Investor Relations OfficerorMedia Relations:Teruca Rullán, 787-281-5170Mobile: 917-679-3596Senior Vice President, Corporate Communications